As the end of 2017 approaches, the IRS is encouraging taxpayers to consider a tax withholding checkup. Taking a closer look at the taxes being withheld now can help ensure the right amount is withheld, either for tax refund purposes or to avoid an unexpected tax bill next year.
The withholding review takes on even more importance given a tax law change that started last year. This change requires the IRS to hold refunds a few weeks for some early filers claiming certain tax credits. In addition, the IRS and state tax administrators continue to strengthen identity theft and refund fraud protections, which means some tax returns could require additional review time next year to protect against fraud.
The IRS is also cautioning people to be careful and check to make sure they have enough withheld from their paychecks. Under-withholding can lead to a tax bill as well as an additional penalty. The IRS especially encourages people with a second job, such as those in the sharing economy, or with a major life change to check whether they are having enough withheld or if they are making the appropriate estimated tax payments.
"With only a few months left in the year, this is a good time to check on your withholding," said IRS Commissioner John Koskinen. "How much you choose to withhold is a personal choice, but checking now can reduce the chance for a surprise tax bill when you file in 2018."
Download the full IRS Tax Article to better prepare yourself for the upcoming tax time in 2018.